Fed Meeting Minutes, GDP Data Expected

Two potentially market-moving takes on the economy are due out in the week ahead.

On Tuesday, the Federal Reserve releases the minutes of its May 3 meeting, and investors will look closely to see how the Fed governors feel about inflation and the strength of the economy.

On Thursday, the Commerce Department releases its estimate for U.S. gross domestic product for the second quarter. The GDP, a measure of all the goods and services produced in the United States, was surprisingly sluggish in April’s reading. Economists’ forecasts, averaging 3.7% annualized growth, might be overly optimistic.

However, even if the markets drop on both reports, the gains of last week will be tough to erase in a few trading sessions. Stocks had a big week. The Dow Jones industrials climbed 3.3%, the Standard & Poor’s 500 rose 3.1%, and the Nasdaq composite was up 3.5%.

In the first take on second-quarter GDP, issued in April, the nation’s economy grew at an annualized rate of 3.1%, far less than the 3.5% that Wall Street expected. This time, with strong earnings and falling oil prices, analysts anticipate a much stronger reading.

“Talk about a soft spot has vaporized,” said Tim Rogers, chief economist at Briefing.com in Boston. “The economy is running steady and strong based on the pillars of consumer spending and business investment.”

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The Week Ahead

Tuesday

* The National Assn. of Realtors reports U.S. sales of existing homes for April.

* Earnings expected from Medtronic Inc.

Wednesday

* The Commerce Department reports April durable-goods orders and new-home sales for April.

Thursday

* The U.S. reports first-quarter GDP.

* Earnings due from Costco Wholesale Corp. and Computer Associates International Inc.

Friday

* The University of Michigan releases its consumer sentiment index for May.